National Clean Diesel Campaign American Recovery and Reinvestment Act of 2009 Diesel Emission Reduction Act Funding March 16, 2009

2 New Opportunity: American Recovery and Reinvestment Act of 2009 Funding President Obama signed Bill into Law on February 17, 2009 $789 billion economic stimulus package includes $300M for diesel programs Diesel grants will focus on promoting economic recovery, preserving and/or creating jobs, and reducing diesel emissions

3 ARRA Allocation Details State Programs - ~$1.7 million for each state including the District of Columbia National Grant program - ~16 million for Mid-Atlantic Region (total - $158 million) Emerging Technology Grants - $20 million Financing Grants - $30 million

4 ARRA of 2009 DERA Details All grants will be new Grants will have new/different requirements in addition to DERA requirements Reporting on job creation/retention More frequent reporting on finances, projects Milestones for expenditures Project/budget period through Sept. 30, 2010 Grants must be awarded quickly

State Program By statute 30% of funding -- $88M Clean Diesel Emerging Technologies Program By statute <10% of funding - $20M National Program By statute 70% of funding - $206M Diesel Emissions Reduction Program $300 Million under ARRA of 2009 DERA National Clean Diesel Funding Assistance Program Regional Grant Competitions $156M SmartWay Clean Diesel Finance Program - $30M 5

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7 Regional, state, local, tribal or port agency with jurisdiction over transportation or air quality; and Nonprofit organization or institution which Represents or provides pollution reduction or educational services to persons or organizations that operate diesel fleets; or Has, as its principle purpose, the promotion of transportation or air quality National Clean Diesel Funding Assistance Program: Eligible Entities

8 National Clean Diesel Funding Assistance Program: Public Fleets Will include private fleets contracted or leased for public purpose, such as private school buses or refuse haulers Only eligible entities can apply directly for funds (i.e., school district or non-profit applies on behalf of private school bus contractor) At least 50% of funding is dedicated for the benefit of public fleets

9 National Clean Diesel Funding Assistance Program: Eligible Fleets and Equipment Buses Medium or heavy duty trucks Marine engines Locomotives Nonroad engine, stationary engine or vehicle used for: Construction Handling of cargo (including at a port or airport) Agriculture Mining Energy production

10 National Clean Diesel Funding Assistance Program: Priority Projects Maximize public health benefits Are the most cost-effective Are in areas with high population, air quality issues, and air toxic concerns Are in areas that receive a disproportionate quantity of air pollution (i.e. truck stops, ports) Maximize the useful life of the engine Conserve diesel fuel and utilize ULSD (early introduction of ULSD for nonroad projects) Project proposals that align with these priorities, along with job creation/retention, will receive higher scores in the evaluation process:

11 National Clean Diesel Funding Assistance Program: Use of Funds Technologies and engines must be verified and/or certified by USEPA or CARB (select Verified Technology List) Incremental cost of engine/vehicle replacement (old engine must be sent to be remanufactured or scrapped), engine repower, engine rebuild Cleaner fuels Covers incremental costs of cleaner fuel versus conventional diesel fuel

12 National Clean Diesel Funding Assistance Program: Use of Funds Idle Reduction Technologies (EPA approved) Electrified Parking Spaces (truck stop electrification) Auxiliary Power Units and Generator Sets Fuel Operated Heaters Battery Heating and Air Conditioning Systems Thermal Storage Systems Shore Connection Systems and Alternative Maritime Power

13 National Clean Diesel Funding Assistance Program: % of $ for Technologies/Projects EPA’s Clean Diesel funding will cover up to: 75% for engine repowers 25% for all replacements except 50% for school buses that meet 2010 standards 100% for retrofit technologies 100% for idle reduction technologies 100% for engine upgrades (kits only) 100% for incremental cost of cleaner fuels

14 Cannot fund the cost of emissions reductions mandated under Federal, State or Local law Grants are not for emissions testing Cannot fund fueling infrastructure costs, such as the acquisition cost of tanks, the construction or acquisition costs of fuel depots, or the construction or acquisition costs of biodiesel manufacturing facilities National Clean Diesel Funding Assistance Program: Use of Funds

15 National Clean Diesel Funding Assistance Program: ARRA of 2009 Estimated Timeline ActivityDate Information and preparation of applications February Application submissionsMid-March - End of April (deadline) EPA evaluationsMay Project review and awardMay Project implementationJune 9, 2008 – Sept. 30, 2010

State Program By statute 30% of funding -- $88M Clean Diesel Emerging Technologies Program By statute <10% of funding - $20M National Program By statute 70% of funding - $206M Diesel Emissions Reduction Program $300 Million under ARRA of 2009 DERA National Clean Diesel Funding Assistance Program Regional Grant Competitions $156M SmartWay Clean Diesel Finance Program - $30M 5

17 SmartWay Clean Diesel Finance Program: Overview HQ conducting competition and managing grants For grants which establish innovative finance program for eligible vehicle or equipment owners Everything else is the same as National Competition Same eligible entities Same eligible vehicles & equipment Same priority projects

18 SmartWay Clean Diesel Finance Program: Use of Funds Finance Program grants are used to establish loans or other mechanisms, which: Have better than market terms (e.g., lower interest rate, lower closing costs, greater loan approval rates, etc). Any program income generated must be used to further the project’s clean diesel goals (e.g., more loans for cleaner vehicles).

19 SmartWay Clean Diesel Finance Program: Examples Examples of Innovative Finance Projects: Loan funds to diesel fleet owners to install idle controls (at lower interest rate or 0%). Repaid loan funds are then loaned again to more fleet owners. States or non-profits partner with lending institutions: Partnership receives grant and leverages this money by borrowing additional funds at lower interest rate (equity investment). Low-cost loans are made for clean diesel retrofits or replacements.

20 SmartWay Clean Diesel Finance Program: ARRA of 2009 Estimated Timeline ActivityDate Information and preparation of applicationsFebruary Application submissionsMarch – April 13 (deadline) EPA evaluationsApril Project review and awardMay Project implementationJune 9, 2008 – Sept. 30, 2010 Any funding not utilized by this program will revert to the National Funding Assistance Program

State Program By statute 30% of funding -- $88M Clean Diesel Emerging Technologies Program By statute <10% of funding - $20M National Program By statute 70% of funding - $206M Diesel Emissions Reduction Program $300 Million under ARRA of 2009 DERA National Clean Diesel Funding Assistance Program Regional Grant Competitions $156M SmartWay Clean Diesel Finance Program - $30M 5

22 Clean Diesel Emerging Technologies Program: Overview Program is for projects that will use technologies not yet verified and/or commercialized but on EPA’s Emerging Technology List Program does not cover research and development costs Only eligible entities can apply

23 Clean Diesel Emerging Technologies Program: Manufacturers Manufacturers should partner with an eligible entity Manufacturers must be on EPA’s emerging technologies list prior to RFA closing date To get on this list, manufacturers must work with EPA to apply for verification and develop a test plan for evaluating their technology select Emerging Technologies

24 Clean Diesel Emerging Technologies Grant Program: ARRA of 2009 Estimated Timeline ActivityDate Information and preparation of applicationsFebruary Application submissionsMarch – April 20 (deadline) EPA evaluationsMay Project review and awardMay/June Project implementationJune 16, 2009 – Sept 30, 2010 Any funding not utilized by this program will revert to the National Funding Assistance Program

State Program By statute 30% of funding -- $88M Clean Diesel Emerging Technologies Program By statute <10% of funding - $20M National Program By statute 70% of funding - $206M Diesel Emissions Reduction Program $300 Million under ARRA of 2009 DERA National Clean Diesel Funding Assistance Program Regional Grant Competitions $156M SmartWay Clean Diesel Finance Program - $30M 5

26 “States shall use funds to develop and implement grant and low-cost revolving loan programs as appropriate to meet State needs and goals relating to the reduction of diesel emissions” States can subgrant or subaward funds Funding may go to Federal, local and/or state mandated retrofits under State program State Clean Diesel Grant Program: Use of Funds

27 DERA State Program ARRA Funding Highlights $88M for State Program If all 50 states and DC apply for funds: ~ $1.73M per grant Otherwise, the DERA allocation population formula will apply Matching incentive provision is removed under stimulus States can use up to 15% for program administration (travel, personnel, etc.) States must establish new grants with this funding Expediency for project implementation is a critical priority Leftover funding reverts back to National Program

State Program Time Line ActivityDate Notice of Intent to Apply Sent out to States via Feb 26 Work Plan Template and program information sent out to States by Regions (provided by EPA OTAQ) Feb 27 Notice of Intent due back to EPA OTAQ March 6 EPA OTAQ calculates final amounts for States and sends to Regions; Regions send funding amounts to States March 11 Work Plan, SF424, SF424A and other required forms sent back to EPA Regions March 20 Award State Grants By April 17 Grant Project and Budget PeriodApril 20, 2009 – September 30, 2010

29 ARRA Reporting EPA will release information on new ARRA reporting requirements Will include job creation/retention metrics Centralized federal government ARRA reporting site: Regular DERA reporting also required Number of grants and applications received Amount of each grant Actual and estimated air emissions reductions Cost-effectiveness and cost-benefits Diesel fuel conservation Lessons Learned and additional Information as EPA designates

30 ARRA of 2009 DERA Grant Program: Resources and Tools EPA web site State Program materials National program sample application List of previously awarded grants State and Local Toolkit Posted RFAs Forms for application (all regular required grants forms) Application Assistance Calls (see web site for times, call-in numbers)

31 CONTACTS Bill Jones, U.S. EPA Mid-Atlantic Region, Susan Stephenson, MARAMA